SAN DIEGO, March 07, 2023 (GLOBE NEWSWIRE) — The Class: Robbins LLP reminds investors that a shareholder filed a class action on behalf of all persons or entities that purchased or otherwise acquired Kornit Digital Ltd. (NASDAQ: KRNT) ordinary shares between February 17, 2021 and July 5, 2022, for violations of the Securities Exchange Act of 1934. Kornit develops and manufactures digital printing technologies for textile, garment, and apparel industries.
What now? Shareholders in similar circumstances may be eligible for participation in the class action against Kornit. Shareholders who wish to be the lead plaintiff in the class action must file their papers no later than April 17, 2023. A lead plaintiff acts on behalf of the class members to direct litigation. For a claim to be valid, you do not need to take part. For more information, click here.
All representations are on a contingent fee basis. Shareholders do not pay any fees or expenses.
What is the Case About Kornit Digital Ltd.
According to the complaint, during the class period, defendants touted the purported competitive advantages provided by its technology and assured investors that it faced virtually no meaningful competition in the “direct-to-garment” printing market. The Company also claimed that there was strong demand in digital printing systems, consumables, and the services Kornit provided to its customers to maintain and control its printers, as well managing customer workflows.
In truth, Kornit and its senior executives knew or, at a minimum, recklessly disregarded, that the Company’s digital printing business was beset by significant quality control problems and deficient customer service. Kornit became more susceptible to the pressure of competitors than it represented, and it lacked the competitive advantage it claimed to have to investors. Those problems and deficiencies caused Kornit to lose market share to competitors, which led to a decline in the Company’s revenues, as Kornit’s dissatisfied customers sought out alternative options for their digital printing needs. Kornit also failed to disclose the fact that there were already risks to quality and customer service, despite the Company claiming to warn about them.
Kornit announced its financial results for 2022’s first quarter. It reported a net loss ($5.2 million) compared to a profit ($5.1 million) for 2021. Kornit also informed investors that it expected lower revenues and profitability for the second quarter in 2022. These disclosures and others caused the Kornit ordinary share price to fall by $18.78 per shared, or 33% to $37.63 per sharing on May 11, 2022.
Kornit then announced preliminary financial results, for the second quarter, on July 5, 2022. The Company revealed that it would have a significant revenue deficit in the second quarter. Kornit forecasted that revenue for the second quarter would be between $56.4 million and $59.4 million. That represented a reduction of more than 35% at the midpoint of Kornit’s previous revenue guidance of between $85 million and $95 million that the Company provided less than two months earlier. This news caused the Kornit average share price to fall by $8.10, or 25.7%, and close at $23.46 on July 6, 2022.
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